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Seeking advice early from cash flow problems can help avoid insolvency


It has recently been reported that an events company that had been organising zombie-themed chase games in cities around the UK for the past several years has been placed into liquidation after failing to balance its finances. The company estimates that 50,000 people had participated in its real world zombie chase events throughout the country but all its operations have now been shut down. A statement issued by the company explained that they had struggled to absorb rising costs associated with its events, with high insurance premiums cited as a particularly burdensome cost for the business.

As well as rising expenditure, the company’s founders pointed to falling participation levels and a basic inability to generate profits consistently as key reasons for the company having to cease to trade and enter liquidation. In an attempt to stem the company’s losses, the directors were forced to cancel games in large cities which reduced turnover and caused cash flow problems which resulted in the company being unable to meet its financial commitments.

Regular monitoring can help avoid cash flow problems

The above report demonstrates why it is so important for business owners to regularly review its pricing against the business expenses. Business owners should prepare yearly cash flow forecasts and these should be monitored on a weekly or monthly basis. This is essential to help plan for future events and unforeseen issues. By preparing and monitoring regular cash flow forecasts, this will help identify when cash is coming in and if there are likely to be any cash flow difficulties in the immediate future.

If a business is incurring trading losses or has cash flow problems, business owners often spend an increasing amount of their time fire fighting problems and less time focusing on a way to deal with the problems. If these issues are not addressed in a time efficient manner, the problems can escalate.

Cash flow problems should not be ignored

It is easy for a business owner to ignore cash flow issues. I have heard so many owners say that they didn’t seek professional help because they thought that the next big contract was around the corner which would mean that the business could trade out of its difficulties or they thought that HM Revenue & Customs or their suppliers wouldn’t take enforcement action.  It is important to tackle the possibility of becoming insolvent before HMRC hits.

As soon as a business starts to experience cash flow difficulties, it is important to seek help. It may have been possible to save the events company from entering liquidation if the owners had sought advice at an early stage.  

How to resolve cash flow problems and avoid insolvency

At Cashsolv, we pride ourselves on being able to find solutions for businesses that are experiencing cash flow difficulties in order to get it back on the right track.

Here are a few examples of how Cashsolv can assist:-

  • If the company has accrued PAYE, NIC, VAT or corporation tax debts, we can assist in agreeing a Time to Pay arrangement with HM Revenue & Customs.
  • If your customers/clients are late in paying, our commercial debt recovery company Debtcol, can assist in converting your debts into cash.
  • If your company is suffering from a late payment or an unexpectedly cancelled contract, resulting in it being unable to service its own liabilities and is in need of cash quickly, have you considered an emergency business loan? We offer short term loans (typically one to three months) and longer term loans (up to twelve months).
Sandie Williams By Google+ |
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